I ended my last piece (‘Patent rights and public health: What are Bharat’s options?’ IE, January 19) on the note that I would touch upon various aspects of the creation of an ecosystem for innovation. In this piece, I will attempt to highlight the importance of an effective and responsive legal system to encourage investment in innovation.
Between 1999 and 2005, the Indian patent regime witnessed a series of critical changes. The last major amendment to the Patents Act, 1970 was in 2005, when product patents were reintroduced for chemical substances, which impacted the pharmaceutical, biotechnology and agro-chemical sectors. Thanks to these changes, Bharat witnessed an exponential spike in interest and awareness in innovation, the creation of Intellectual Property (IP), and the enforcement of IP Rights (IPRs). This was not limited to patents, and extended to trademarks, copyrights, geographical indications, industrial designs, semiconductor design layout and plant variety protection.
This development did not happen in a silo since it was the result of Bharat’s obligations as a member of the World Trade Organisation (WTO) and its instruments such as Trade-Related Aspects of Intellectual Property Rights (TRIPS). These obligations required TRIPS member countries to adopt common minimum definitions and conditions for grant or refusal, and protection of IPRs, while making room for flexibilities to accommodate national interest, such as in public health. This resulted in national IP laws being revamped to bring them into line with TRIPS commitments while providing for public-interest carveouts and guardrails. These included compulsory licences, checks against evergreening of patent rights, the requirement of local commercial exploitation of patented technology to upgrade domestic industrial capabilities, and changes to competition law to prevent abuse of IP monopolies. These developments must be understood in the context of the post-liberalisation coming of age of Indian commerce and its efforts to remain competitive in the domestic market and to compete globally within the WTO regime. With this came greater complexity and sophistication in commercial models, transactions and instruments.
Naturally, the quantum and variety of commercial disputes, in particular IP disputes, saw a sharp rise, and with it rose stakeholders’ expectations that the Indian legal system should respond with greater sophistication and expedition. These expectations, initially the preserve of foreign investors, were increasingly shared by Indian players due to their growing heft. These expectations assumed criticality since the quality and speed of resolution became an important metric in global rankings to assess the ease of doing business in Bharat.
Broadly speaking, the Indian legal system responded in two ways. The first was to provide a strong impetus to Alternative Dispute Resolution (ADR) mechanisms such as arbitration and mediation. The hope was that this would decongest civil courts and translate to nuanced and speedy disposal of time-sensitive commercial disputes without being bogged down by conventional trial procedures and with minimal interference by courts. The ongoing chorus in Bharat for more investment towards creating a full-fledged world-class ADR infrastructure and ecosystem tells us that while a lot remains to be done, the ADR initiative has found broad acceptance with stakeholders.
The second response was an attempt to improve the conventional adjudication process by enacting the Commercial Courts Act in 2015. This empowered state governments to constitute dedicated commercial courts in consultation with their respective high courts. The Act also introduced a raft of provisions and made amendments to the Code of Civil Procedure that were specifically applicable to commercial disputes, with a view to expediting their disposal.
Under this initiative, arguably the most successful example has been that of the Delhi High Court, which is worth studying and replicating wherever possible to benefit courts and litigants across the country. Even prior to the 2015 Act, the Delhi HC had a track record of delivering landmark judgments in complex commercial disputes, especially IP disputes. This could be attributed to a host of factors besides locational advantage, such as the presence of an active and thriving original side of the Delhi HC — the court is empowered by its parent statute to act as the forum of first instance for civil suits above a certain pecuniary value. Even before 2015, this feature of the Delhi HC allowed parties to high-end commercial disputes to access its jurisdiction directly as the civil court of first instance instead of having to approach subordinate courts in Delhi.
Over the years, this has resulted in the Delhi HC having the opportunity to deliver nuanced judgements in several complex matters involving pharmaceutical drugs, Standard Essential Patents in the realm of telecommunication, copyrights and matters requiring a tradeoff between IP Rights and fundamental rights. So much so that for legal systems across the Global South and North, Indian jurisprudence emanating from the Delhi HC has served as the benchmark for treatment of IP Rights and protection of national interest in the realm of public health. The Commercial Courts Act allowed the court to build on this track record and create an Intellectual Property Division to exclusively handle the volume and quality of IP disputes landing before it. The switch to e-filings during the Covid lockdown in 2020 made the HC a paperless e-court for the most part, which has become a boon for litigants seeking urgent relief. In 2022, to further streamline the handling of IP disputes, the Delhi HC framed its own IP Division Rules, which have resonated with litigants, investors and IP bodies both within and outside Bharat, such as the World Intellectual Property Organisation. The net positive has been the high confidence reposed by stakeholders in the High Court’s ability to handle high-end and complex commercial and IP disputes. This framework can be replicated in courts across the country to cater to various innovation and commercial hubs, provided similar investment is made in ramping up their infrastructure.
The bottom line is this: If Bharat wishes to preserve the confidence of those who have invested in its vision of achieving Viksit Bharat by 2047, and inspire more people to invest in it, it needs to create a culture and ecosystem of innovation and entrepreneurship, of which the legal system is an integral, critical and indispensable component. This would convey the message that Bharat respects merit, values innovation, enforces rights and dispenses justice in keeping with its civilisational ethos, which places a premium on nyaya and dharma.
The writer is a senior advocate practising before the High Court of Delhi and the Supreme Court of India. He is the author of India that is Bharat: Coloniality, Civilisation, Constitution, and India, Bharat and Pakistan: The Constitutional Journey of a Sandwiched Civilisation
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